Can the seller pay closing costs? A real estate attorney weighs in
Yuriy Moshes October 13, 2026 11:05 am
Can the seller pay closing costs? A real estate attorney weighs in In real estate,
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In December 2025, New York State passed the Trapped at Work Act, a groundbreaking law designed to protect employees from pay-to-quit agreements and other unfair employment contracts. This law prevents employers from using employment promissory notes or stay-or-pay agreements that financially penalize employees for leaving a job early.
Whether you are an employee, intern, or independent contractor, understanding the Trapped at Work Act New York is essential. This guide explains what the law prohibits, who is protected, key exceptions, penalties for employers, and when to consult a labor law attorney in New York or employment law attorney in New York.
AUTHOR YURIY MOSHES, ESQ
Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation
and real estate transactions as his areas of expertise
Schedule a confidential consultation with Moshes Law — our New York employment attorneys can review your contract and protect your rights under the Trapped at Work Act.
The Act prohibits employers from requiring workers to sign contracts with employment promissory note repayment rules that penalize leaving early. These stay-or-pay agreements in New York are now unenforceable.
These clauses, often called employment promissory notes or stay-or-pay agreements, effectively trap employees in their roles by threatening financial penalties. Under this law, such provisions are unenforceable and against public policy.
The law ensures New York employee mobility rights, allowing workers to change jobs freely. It also provides training cost repayment protections, so employees aren’t financially trapped by their employer. Prior to this law, workers could face steep financial penalties for seeking better opportunities, creating conditions akin to indentured labor.
The Trapped at Work Act New York ensures:
This law complements existing NYC labor laws and New York state employment laws, which already provide protections such as minimum wage, anti-discrimination measures, paid leave, and safeguards against unlawful labor practices in New York.
Employers cannot require employees to sign agreements that:
Even if included in a contract, these provisions are unenforceable under New York law.
The law applies broadly, covering:
Essentially, anyone performing work under a contract in New York is likely protected.
Certain repayment agreements remain lawful:
These exceptions are important for both employees and employers to understand, as they clarify which obligations remain enforceable.
Violating the Trapped at Work Act can result in:
These penalties underscore the importance of consulting a labor law attorney in New York if you suspect your employer is violating the law.
Employees hired after December 19, 2025, cannot be forced to sign promissory notes or pay-to-quit agreements. Any such attempt is unlawful.
Pre-existing agreements may require review. A labor law attorney in New York can determine whether these contracts are still enforceable.
Consult a lawyer for workers if your employer:
A labor law attorney in New York or employment law attorney in New York can assess your rights under NYC labor laws and New York state employment laws.
New York has long been a leader in protecting workers. The Trapped at Work Act reinforces this by ensuring employees can change jobs freely without fear of punitive financial penalties.
This law strengthens worker protections in New York and complements NYC labor laws and New York state employment laws, including workplace discrimination protections in NYC, making the state a fairer place to work.
The Trapped at Work Act New York is a milestone in protecting employees from unfair repayment obligations and pay-to-quit agreements. It provides:
If you believe your rights under the Trapped at Work Act have been violated, consult a lawyer for workers, labor law attorney in New York, or employment law attorney in New York today. Protect your rights under NYC labor laws and New York state employment laws — you don’t have to face unfair employment contracts alone.
It is a law that prohibits employers from using agreements that financially penalize employees for leaving a job early, including training repayment or pay-to-quit clauses.
Most employees, interns, apprentices, independent contractors, volunteers, and sole proprietors in New York are protected.
Only if they fall under exceptions like relocation expenses not tied to training, company property repayment, academic sabbaticals, or union collective bargaining agreements.
No. Any attempt to enforce pay-to-quit agreements or similar clauses is prohibited and unenforceable.
Contact a labor law attorney New York or employment law attorney New York immediately to review your contract and discuss potential remedies.
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